- Growth in Singapore’s participation rate slowed in 2018, potentially putting pressure on firms seeking to expand
- The issue of the country’s ageing population presses on in the face of short labour supply
- Wage pressures in high-skill industries have eased in Singapore over the last five years
Singapore’s labour market participation rate, which is one of the highest across Asia*, is expected to decline, putting pressure on firms seeking to recruit, according to the seventh edition of the Hays Global Skills Index (‘the Index’), a report published by recruitment experts Hays in conjunction with Oxford Economics.
The 2018 report – titled ‘Investing in the Skills of Tomorrow; Avoiding a Spiralling Skills Crisis’ – examines professional employment markets across 33 countries/regions and measures the ability of companies to access skilled workers, providing a unique insight into the health of the global labour market.
In Singapore, the Overall Index score is 4.4, suggesting that its labour market is less pressured than historical norms. The Overall Index score is an aggregate of the seven key indicators which were chosen to highlight supply-side issues, demand-side issues, or both supply- and demand-side issues relating to the hiring of skilled workers.
The available talent pool for Singapore employers to tap into remains a key concern across a wide range of industries and occupations, including talents in data analytics, development (emerging technologies), and internal audit and controls. A shrinking workforce as a result of an ageing population, coupled with a tighter immigration policy, continues to put pressure on firms seeking to recruit.
Across Asia*, general participation rates have been driven up by improvements in education levels and other socioeconomic factors. This year, however, a slowdown in the growth of labour market participation rates across various age groups has been a major driver of the region’s higher score. Businesses are therefore struggling to find the right talent and continue to suffer from low productivity levels. This particularly resonates with the current Singapore employment market, which has one of the highest labour market participation scores in the region, indicating a relatively small talent pool in the workforce.
In addition, a lower score in the wage pressure in high-skill industries in Singapore, compared to previous years, indicates that wages in said industries are rising more slowly or in line with wages in low-skill industries. Wage growth in lower-skill industries, including administrative services and transport, exceeded that in high-skill ones. This narrowed Singapore’s industry wage gaps.
Commenting on the findings of the Index, Grant Torrens, Business Director at Hays Singapore said:
“The Index provides us with invaluable information about labour markets and whether the global workforce is equipped with the skills required to flourish in the rapidly developing world of work. This year’s Index has revealed the many issues currently in the labour market globally, such as the growing talent mismatch, widespread productivity puzzle, ageing population, gender pay gaps and the shirking share of the national income for workers.”
“The Asia Pacific’s average Overall Index score, which remained at 4.6 between 2017 and 2018, exposed the alarming signs behind the global lack of growth in productivity and wages. Labour productivity in the region has flatlined in the face of an ageing population.”
“In order to prepare for an ageing workforce, policy makers will need to focus on improving the employability of workers at an older age by facilitating the training necessary to update their skills. While greater international migration would help boost labour supply and address the ageing workforce in some countries, some argue that migrants can only play a temporary role given they too will inevitably age. Certainly, finding other ways to boost productivity will help offset the impact of an ageing population.”
To learn more about the Global Skills Index, please click here.
*In Asian countries/regions in which Hays operates: Mainland China, Hong Kong, Malaysia, Japan and Singapore